Gold (XAU/USD) surged to an all-time high of $3,586 on Friday after US employment data came in weaker than expected, reinforcing expectations of a Federal Reserve rate cut this month. At the time of writing, the precious metal is trading around $3,580, up nearly 1% on the day, as investors flock to safe-haven assets amid broad US dollar weakness and sliding Treasury yields.
Labor market weakness cements dovish Fed outlook
The US economy added just 22,000 jobs in August, far below the 75,000 consensus. July’s figure was revised slightly higher to 79,000, but the unemployment rate rose to 4.3%, its highest since late 2021. Wage growth held steady at 0.3% month-on-month and 3.7% year-on-year.
Other labor indicators also showed signs of cooling: ADP private payrolls slowed to 54,000 in August, JOLTS job openings dropped to 7.18 million, and initial jobless claims rose to 237,000. Meanwhile, ISM employment gauges for both manufacturing and services remain in contraction.
The string of weak data has shifted focus to labor market risks, with traders now fully pricing in a 25-basis-point cut at the Fed’s September 16–17 meeting. Market speculation of a larger 50 bps move has also grown.
Market movers: dollar retreats, yields fall
The US Dollar Index (DXY) slipped below 98.00, hovering near the lower end of its August range around 97.50. US Treasury yields dropped across the curve, with the 10-year note sliding to 3.64% and the 2-year falling to 3.48%, both at their lowest since April. Lower yields reduce the opportunity cost of holding gold, reinforcing bullish momentum.
Technical outlook: bulls eye $3,600 barrier
XAU/USD posted a fresh record at $3,586 before consolidating near $3,575. Price action remains constructive, with gold comfortably above the 50-period SMA on the 4-hour chart at $3,473.
Momentum indicators also support the bullish case: the Relative Strength Index (RSI) is holding near 70, while the Average Directional Index (ADX) signals a strong uptrend despite a short-term slowdown.
Immediate support is seen at $3,550, followed by $3,450. On the upside, a break above the $3,586 all-time high would expose the psychological $3,600 level and potentially higher.
